Arab Today, arab today oil price slump pushes ruble down
Last Updated : GMT 14:53:29
Arab Today, arab today
Arab Today, arab today

Oil price slump pushes ruble down

Arab Today, arab today

Arab Today, arab today Oil price slump pushes ruble down

Monaco - Arabstoday

The ruble continued its slide in Monday’s morning trade on the MICEX-RTS foreign exchange market, amid negative foreign economic data and falling oil prices, with analysts predicting the central bank would intervene to defend the national currency. As of 11:38 a.m. Moscow time (07:38 GMT), the ruble plunged by 20 kopecks to 33.88 rubles to the dollar and by 43 kopecks against the euro to 42.08. The ruble value of the dollar/euro bi-currency basket fell by 22 kopecks to 37.49. Futures for Brent crude, an oil benchmark for global markets, plunged below the psychologically important $100 level for the first time since October on Friday and sank further to below $97 per barrel on Monday. Analysts had forecast before trade began that the ruble would remain under pressure, with the price of Brent crude now approaching $95 per barrel in Monday trade. Speaking over the weekend Central Bank of Russia Chairman Sergei Ignatyev did  not rule out  further  ruble declines, particularly if oil prices fall further. \"If oil prices halt  their decline, the ruble will likely gain in value. If oil prices continue to decline, then it is possible, but not absolutely guaranteed that the ruble will weaken but at much slower rates than what has happened because we will be much more active with forex interventions,\" Ignatyev said on Saturday at a meeting with Prime Minister Dmitry Medvedev. Most U.S. stock indices closed down 2.2-2.8 percent on Friday on weak labor data in the United States and negative economic data from Europe and China, causing increased investor concerns about the state of the global economy and prompting them to dump riskier assets, including the Russian ruble as a raw material currency, and seek refuge in the U.S. currency. “In this situation, the dollar has all the potential to strengthen further, including on the Russian market,” banking analyst Yury Kravchenko from Veles Capital said. China’s non-manufacturing purchasing managers’ index dropped to 55.2 in May from 56.1 in April while U.S. unemployment rose to 8.2 percent in May from 8.1 percent in April and payrolls increased less than the most pessimistic forecast, sending alarming signals to global markets. At the same time, the head of the Bank of Russia let it know on Friday that the regulator is starting to sell foreign currency more actively at the current levels to halt the ruble’s weakening, which may somehow cool the forex market players’ fervor,” he said. The Bank of Russia stayed away from active intervention in the domestic foreign exchange market during most of last week, letting the ruble value of the dollar/euro bi-currency basket move to the upper boundary of the 32.15-38.15 ruble range set by the regulator. The regulator intervened heavily only on Friday, selling some $200 million, when the ruble value of the bi-currency basket came close to the upper boundary of the bi-currency basket.   “But one should not forget about the fall of the (Brent) oil price below the psychologically important level of $100 per barrel. Further downward movement to the level of $90 per barrel will give a new impetus to foreign currency buyers on the Russian market,” Kravchenko said. His view was shared by Alexei Kozlov, chief analyst at UFS Investment Company. “On the one hand, further drops in oil prices and a new portion of negative economic data will exert pressure on the Russian ruble, on the other hand, the Bank of Russia’s more active interventions on the foreign market will reduce speculative demand for U.S. dollars and euros,” Kozlov said.

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Arab Today, arab today oil price slump pushes ruble down Arab Today, arab today oil price slump pushes ruble down

 



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